Software's Ultimate Sandbox

it’s a good line. but while all the plans put in place to keep the lab’s free-thinking researchers closely attuned to corporate aims make perfect sense, they do little by themselves to dispel the cloud of doubt that hovers over Microsoft Research.

One question mark centers on how the government’s antitrust suit against Microsoft might affect the company’s research arm-especially if Microsoft were to lose. Myhrvold’s lone public comment on the subject, quoted in the trade newspaper Computerworld, tended toward the dramatic: “What worries me is that if we create and innovate and discover something new, are we going to be able to let our customers have it? You’d think that would be a slam-dunk easy question, but that’s not the world we live in.”

While such a reading of antitrust law is not entirely out of bounds, historical precedent suggests a less dire outcome. Similar antitrust actions at DuPont, General Electric, AT&T, IBM and Xerox-most of which have forced the companies to change business practices-have not curtailed research organizations, says David Hounshell, professor of technology and social change at Carnegie Mellon. In fact, Hounshell notes, it’s far more likely for antitrust pressures to increase the role of research. That’s because outside acquisitions and licensing deals typically fall under increasing scrutiny, making it more desirable for companies to innovate from within.

DuPont, for example, endured eight federal antitrust suits between 1944 and 1963. But, says Hounshell, “during this period it dramatically expanded its research programs. Its executives saw research, and particularly fundamental research, as the only course open to it because it was under antitrust pressure. I would gather that executives at Microsoft are probably thinking a lot the same way.” Witness Microsoft’s decision last fall to open a lab in China and the mandate to reach 600 research staffers by 2000.

The other great mystery centers on the lab itself. Microsoft’s upstart research arm clearly has a lot going for it. For one thing, as the universities and government labs responsible for many fundamental advances in computing scale back research, it is filling a vital void. Then, too, no one is contesting the ability of the people inside Building 31 to do some truly innovative work. “Nathan [Myhrvold] is a very imaginative guy, and he and Rashid are hiring some incredibly excellent people,” says Xerox PARC’s Brown. “There’s no question in my mind that they’re building up a firstclass research operation.”

But people alone will not carry the lab to greatness-and the lab’s missteps on the Talisman and Internet fronts have to raise some red flags. “While they’ve certainly gotten a talented team of people together, there’s not much you can point to in the way of output-and output has to be the measure of success of any research organization,” notes James C. McGroddy, former director of IBM Research. McGroddy speaks on this topic with authority; he spearheaded IBM’s campaign during the early 1990s to make the scientifically esteemed organization more relevant to Big Blue’s businesses.

In the end, McGroddy and others who take a harder line still give the Soft at least a fighting chance of pulling off its research dreams. Michael D. Garey, director of mathematical sciences research at Lucent’s Bell Labs, says that more and more he finds himself competing with Microsoft for top talent. He sums up the lab’s prospects this way: “If they do it right, if they hire people and let a decent number of them do research that gets published in serious journals, then maybe one of these days the reality will match the PR story, and they will take their place among the premier industrial research labs.”